Huge differences in lead-times makes supplies uncontrollable

The rampant growth that the industry seen has seen in the past two years has made supplies almost uncontrollable. Managing logistics has therefore become vital for brands to secure their market position.

The differences in lead-times have become huge. Not only compared with pre-corona standards, but also between the various manufacturers and the countries where they are based. The long list of bicycle parts with an increased lead-time is headed by frames. In pre-corona days, the average delivery times was 3-4 months. This has gone up to an estimated 8 to 15 months.

Brakes are the bottleneck

Another product group that has seen a huge increase in lead-time of up to 12 months are brakes and its various component. This came forward in the list shared by the Confederation of the European Bicycle Industry (CONEBI) recently. Their study is more than worrisome. Literally only one item on their parts & components overview reported a similar lead-time as before March 2020, and this was spokes.

Assembling e-bikes and bicycles has become a puzzle. Not because of their complexity, seasonality, expected sales or new product design, but only with finding an answer on the question of how to get the right components at the right location on time.

Product unavailability put sales under pressure

In the 2021 market reports on Germany and the Netherlands it was already obvious that the market could not meet demand. In the Netherlands product availability was just not good enough to avoid a decline in total sales volume. According to Burkhard Stork, MD of the German industry organization ZIV, “the industry could have achieved an even better result when urgently needed parts would have been available in time.”

The German e-bike market increased by 3% to 2 million units last year, but the sales volume of regular bicycles declined by 10% to 2.7 million units. This fluctuation is a direct result of the industry’s choice to focus on e-bikes and specify the rare components on these highly priced bikes instead of regular bicycles. These buoyant sales figures are continuing into 2022 as the German industry has been able to step up production and sales volumes.

ZIV Managing Director Burkhard Stork

“The industry could have achieved an even better result when urgently needed parts would have been available in time.”

100% plus price increase

The supply chain constraints are getting even more complicated due to the rapidly rising prices for raw material. According to CONEBI, the price of aluminium has gone up by 100% since March 2020. Also price hikes for steel (+50%), carbon fibre (+30%), rubber (+70%) and lithium (+400%) have already had their impact on retail prices.